Survey: Telcos Could Win Customers

8/03/2007 8:00 PM Eastern

By: Linda Haugsted

Telephone companies are more likely than cable providers to attract customers taking advantage of bundled-services offers over the next 12 months, because the phone providers are perceived to be better at customer service, according to a study released July 31 by CFI Group.

Of the respondents, 20% said they were highly likely to purchase a bundle of services in the next 12 months and 54% said they would seek those products from the local telephone provider. The report also indicated that 44% of respondents said they would look to cable.

That appears to mean some of the respondents will be jumping ship from cable: 50% of those polled already buy bundled services and cable currently has the majority of package customers at 68%, versus 32% for telephone companies.

The No. 1 reason to switch providers from cable is that the current operator “costs too much,” according to survey results from 69% of those polled.

Senior consultant John Gilbert said GFI Group also researches general trends in customer service, as well as call-center performance and satisfaction, and cable is a frequent “cellar dweller.” He said cable is “in [Internal Revenue Service] territory.”

Telephone companies outrank cable providers in all service categories in the annual American Customer Satisfaction Index compiled by the University of Michigan Ross School of Business. CFI Group is affiliated with the university.

Survey respondents were asked about their current service provider, and Bright House Networks customers indicated they were least likely to switch (15%). Cablevision Systems appears most vulnerable: 25% of its customers said they might switch. Cablevision faces stiff competition throughout its New York-New Jersey market from Verizon Communications, which is deploying FiOS high-speed Internet and television services. The likelihood to switch by telco customers was in the 11% to 19% range, depending on the provider.

Rates also contribute to the desire to switch among broadband customers, but that applied to both major providers. In the survey, 68% of cable and 58% of digital-subscriber line customers said their Internet access cost too much. Cable customers also said they would switch to get a better service plan (49%) or because customer service is bad from their cable provider (41%). DSL customers said they would switch for better reliability (44%).